In this issue of The Actuary, you have a chance to read about changes to the nature of the actuarial workforce, the state of actuaries around the globe, changes to how actuaries learn and work across generations, and much more. Continuing along those themes, actuaries have an increased opportunity to expand into nontraditional roles. I sat down with three actuaries with diverse backgrounds, all of whom have taken the leap into a nontraditional actuarial role, to find out what drew them to these roles and what skills you may want to have if you’re considering making a similar leap. The panel includes:
- Laura Bennett. Founder and former CEO of Embrace Pet Insurance for 14 years, Bennett currently consults on InsurTech, international pet insurance industries, company culture and growth. She has a driving passion for niche insurance markets and was named an Actuarial Pioneer by the Society of Actuaries (SOA) for her groundbreaking work on pet insurance. In addition to being an FSA, Bennett has an MBA from the University of Pennsylvania’s Wharton School of Business, where she graduated a Palmer and Siebel Scholar.
- John Dewan. Dewan, an FSA, left his career at Aon Insurance in the 1980s to become a “sports actuary.” At his first company, STATS Inc., Dewan pioneered sports analytics with the most timely and comprehensive sports database, including the first ever real-time box scores in all four major sports. In 2000, STATS Inc. was sold to Rupert Murdoch and Fox News. Dewan subsequently started another company, Sports Info Solutions (SIS), where he currently serves as CEO and continues to specialize in analytical services to 25 of the 30 teams in Major League Baseball (MLB). SIS recently expanded into football. Dewan is also the author of four editions of The Fielding Bible, which has revolutionized defensive baseball analytics and resulted in defensive changes on the field such as “the shift” and evaluation of players with new information such as “defensive runs saved.”
- Taylor Maas. Maas, an ASA and MAAA, is an actuarial manager for Best Buy/Geek Squad. He currently manages the ratemaking and reserving around their service contract business, Geek Squad Protection. He previously worked in the health insurance industry before making his career change in 2015. He is also a contributor to the RecPoker Podcast.
Hiquet: What originally sparked your interest in becoming an actuary?
Bennett: I accidentally got a summer job with an insurance company. I didn’t know anything about actuarial science, and I applied really late for the job. There were two jobs you could get at that time: One was the Canadian equivalent of the NSA, and the other one was to work at Canada Life.
Maas: I attended the University of Minnesota, where I got pushed toward the actuarial science path. I took a course the first semester of my freshman year that focused on aligning your interests with various career paths. I originally thought I wanted to be a civil engineer. We took a placement test in the class and actuary was the No. 1 answer for me. I skipped right over that, since I didn’t know what it was. Then I talked to some friends, family members and someone in the actuarial field. After I learned more about the actuarial career, I decided to pursue it.
Dewan: I began my actuarial career working for an insurance company (Aon), and I loved my job when I was in the insurance industry. Once I passed all of my actuarial exams, I was able to turn my attention to what wound up being my future career, which was the computerization and analysis of baseball data.
Hiquet: What is a typical workday/ workweek like in your role, and how long have you been in your current role?
Maas: I’ve been with Best Buy for about three years. To take a broad lens of what the work year looks like, I prepare for and present quarterly business reviews, and then I calculate rate changes for the business every six months. On a daily basis, there are many days where I go in thinking I’ll be working on X, but I end up working on Y. The hot topic or priority can change on a daily basis, and certain times of the year are busier than others.
The actuarial team at Best Buy/Geek Squad began 10 years ago with three or four people, then shrunk down to about one or two people, and now we’ve started expanding again—we’re up to five people on the team. Athough we’re a small actuarial team, we have reach up to the CFO and get requests from a number of departments. The returns team will ask for help with analysis. The finance team will ask for projections. Controllership will need help with booking revenue for warranty, gift card, tech support or anything that varies with usage rates where they need to match revenue with expenses. Across the organization, we are able to use our actuarial expertise to help other teams do their jobs better.
Dewan: My typical workday is applying analytics to baseball, and we try and find new ways to improve on-field and front-office decision-making. The shining example from my career is the use of the shift. It has grown exponentially in the last eight years since I started doing the analytics. If a player pulls 80 percent of his grounders left of second base, then you should play 75 percent of your players on that side of the infield. Now, our analysis is much more sophisticated based on the player, pitch situation and so on. But it’s been really exciting for me, almost a crowning achievement, to see this major change in the way defenses play baseball. I’m proud to help them develop the supporting analytics to get changes approved by the front office.
Moneyball was a huge moment. Front-office executives were all scholars of the game, they knew how to play the game, but they didn’t want to see the numbers. After Moneyball came out, teams went to the other extreme. More than 100 scouts lost their jobs, as teams said, “We’re just going to use the numbers.” Teams are now understanding that it’s a bit of both. It’s using the analytics to inform the decision makers—applying our actuarial expertise to data is what we’re trained to do.
Bennett: There’s a split between getting work, doing work and networking. One day I might be making calls and reaching out to different people to talk about what I can do for them in a traditional networking style. I also help high-growth companies, such as businesses started by Wharton graduates who I already know. Those encounters tend to result in more equity as opposed to getting paid. I also do international pet insurance consulting.
One thing that really affects what I do each day is that people view insurance very differently in different parts of the world. Marketing in Germany involves presenting enormous amounts of data, whereas in France it is all about feel. There are many similarities in product within a country. When I founded Embrace Pet Insurance, I designed and priced the products. I got data from veterinary hospitals, and I hired an analyst who used to work at Progressive. We partnered with an insurance company, but since it was such an unusual product, they didn’t catch on to everything. Eventually, I wound up being a high-level adviser.
Hiquet: What skills do you think are most important to succeed in a nontraditional role?
Maas: First and foremost, communication. In my prior role, I was working almost primarily with other actuaries, so I could communicate actuarial judgment more easily and use some actuarial jargon. In a nontraditional role, I have to bridge the gap between the actuarial work for an audience that doesn’t always understand it.
Second, curiosity is huge, from the perspective of “I want to understand this project better” or “I want to understand this data better.” We go through problems and approach them in a different way than other departments would.
Hiquet: What has been the biggest surprise or challenge about your line of work?
Bennett: For Embrace, everybody talks about how hard it is to start your own company. But you can’t really know how hard it is until you do it. I have never been so stressed in my life. You might get to the place where you only have two weeks of money left and you’re faced with deciding if you’re going to raise money or not. But the highs are so high, there’s nothing like it. I’d love to do another startup. There’s nothing better than creating something and seeing it take on a life of its own.
Maas: The biggest surprise has been the various ways I can have an impact on different teams. I thought I’d have my core role and then mix in some one-off responsibilities. But my role has grown, including reporting metrics and tools around claims. We take the skills and tools developed for our team and use them to impact other departments.
As far as challenges, it can be difficult to have a math-heavy role while working with people who don’t have as much of a background in math. In many cases, it’s not even high-level math that needs to be communicated. It could be as simple as explaining the relationship between warranty usage rates and how that can differ over a two-year warranty product (e.g., 30 percent year one, 70 percent year two) and how that can affect revenue and expenses.
Hiquet: What advice would you give to someone who is considering breaking out of the traditional insurance/consulting career track?
Dewan: I get emails a lot from young people trying to break into the baseball industry, and I tend to give the following advice, a lot of which applies across any nontraditional role:
- Learn computer programming. Don’t just be able to use Excel and Access, but be able to use and manipulate data using SQL or R. To do that, you need to go beyond the Microsoft Office Suite.
- At baseball’s winter meetings, they have a job seekers program and tons of interns are hired at that time. Go there to see the lay of the land.
- Stay on top of research and trends in the Sabermetrics community. So much of that information is on the internet.
- Develop your analytical skills by doing your own research. It’s nice to want to do it, but until you’re actually doing it, you’re not doing it. Look at data in your free time. I wanted to look and figure out who the best defensive players were, and there was never anything like that. Create something, then share your results publicly to get your name out there.
- Develop writing skills to be able to communicate clearly. Being able to write clearly and communicate your thoughts—and not in an overly technical manner—is important. Actuaries and academics can go over-the-top in how they communicate things, such as their machine learning technique or a Poisson distribution.
Maas: Try and understand what the new role will actually entail and make sure the work interests you. It may not be ratemaking, reserving and forecasting, but actuaries have a lot of useful skills that can be presented and utilized in different ways. Also, if it’s a role that interests you and you can provide value, don’t hesitate too much. If you’re interested in a role and a company is interested in you, it will benefit you the same, if not more, than a traditional role. If you make the leap and don’t like it, I don’t think actuaries will have a tough time getting back into a traditional role.
Bennett: Prepare really well before you do it. You really want to know your purpose. What are you going to do that will add value, and what will people pay you for? If you’re starting your own business, have a co-founder—while there’s a lot you won’t know, hopefully you’re working with people who have that knowledge. It is also helpful to have some money saved up and another source of income to support you, but ultimately you just have to dive in.
Hiquet: Laura, what led you to your current career track, and how did you overcome the nerves of branching out on your own?
Bennett: I didn’t know I had the entrepreneurial gene. My mother was an entrepreneur of sorts and started a bookstore. I loved being a part of that, but I never thought of myself as an entrepreneur. I went to Wharton to get away from insurance. The culture of a large life insurance company wasn’t working for me, and I ultimately wanted to run a company.
While I was at Wharton, a friend’s cat got sick, and she spent $5,000 on her cat and said, “I wish I had pet insurance.” She had looked at what was offered in the United States—it was appalling. Three other students and I entered a business case competition, and I realized no actuarial science had been applied in the space and there was a real opportunity.
Hiquet: How have technology changes affected your job or the way you work over the past five years? What impact do you think they’ll have over the next five?
Maas: Technology affects me in two ways. First, there are the tools I use in my day-to-day job. Second, technology includes the products we’re covering under our service contracts, so we’re changing the view of the products we’re covering.
In my day-to-day job, we’ve made improvements due to new and different technologies. Microsoft has a tool called Power BI for data visualization, which has helped immensely with regard to having dynamic reports and a lot of information readily available. There’s also progress with predictive analytics. Actuaries are in a very unique spot, and at Best Buy, with ratemaking and reserving, we’re always looking at the historical trends, which give us great insight into what can potentially happen in the future. As predictive analytics grows, we’re in a great position to run with it.
Dewan: The technology explosion during my career has been incredible. Back in the ’80s, we developed software to collect information at the pitch level. From there, we added information such as the direction of batted balls. Then we went down to the location, type and velocity of every pitch and better information on the direction of every batted ball.
Now MLB has put millions and millions of dollars into StatCast, which keeps track of things at an even deeper level (route run by the fielder and its efficiency, spin rate of a pitch, etc.). The technology is growing faster than the actuaries and data scientists can keep up. There is a never-ending source of information for our field to analyze. The most successful entities are those that spend the time to find the information that will help them get a leg up.
You can think of a baseball team as a research center. Each team is trying to do its own research, and they want to keep it secret from the other teams. I know some teams have started to dabble in biometric research and fitness tracking. My feeling is that everything is data. If a pitcher didn’t get a good night’s sleep, that’s data. If you can get that data over time, you can use that to discern patterns and predict events. That’s core actuarial work that helps you get a leg up on your opponents—biometrics, blood pressure, pulse and other things that may be more specific to baseball.
Bennett: Technology will continue to have a massive impact. I presented to the Employer Board of the SOA on the future of the actuary and technology, and I said, “All the small little things that we use right now to train actuaries, all of that will be gone.” The mindset is going to change. The nuance with pet insurance is there’s a huge behavioral component and that’s the sort of value a human actuary brings. Technology can take care of the menial stuff.
I do a lot of informational calls with private equity on pet insurance. I can only do one call at a time. I’ll start writing everything I know, put it in white papers, and sell it. It takes almost nothing to do something like that and set up an e-commerce site and self-serve. It establishes credibility and allows you to have more nuanced conversations and charge more for them. The structure of companies is going to change. For actuaries, I think it’s going to be massively different—I see a future where there will be almost no rules-based work.
Hiquet: We are seeing more and more competition and crossover between actuarial science and data science. What do you think the future of the actuarial profession will look like in five to 10 years?
Maas: The actuarial profession is going to keep blending into other nontraditional areas. In traditional job postings, you see a list of college majors ranging from economics to finance. Now you’re seeing more of these traditional listings include actuarial science or actuarial exams among possible prerequisites. Actuaries have a wide range of strengths and are now using them in a wider range of roles, partly because of their backgrounds—actuarial science with a business background, actuarial science with a math background and so on.
Hiquet: How do you think choosing a nontraditional role might have an impact on your future career trajectory and job mobility?
Maas: My career trajectory has expanded. When I first started at Best Buy, the role could have been “come in at 8 a.m., leave at 5 p.m., and this is my life.” But I took on a mindset of “what more can I do, and how can I impact the company?” There are so many expanding roles at Best Buy—there are a lot of data science roles, and there are reporting and analytics roles. If I wanted to stay 100 percent actuarially focused, it would be staying on my team. But I can also see the impact my personal background could have in various departments around the company.
Generally speaking, our team has increased our visibility over the past year. We’ve been meeting with the CFO, the Geek Squad president and multiple VPs. We are the subject-matter experts on a lot of high-dollar items. Just recently, an emerging project was presented to leadership and the response was, “We’ll wait for the actuarial group to come back with their cost estimates.” We’re becoming more known in the company.
Hiquet: Is there anything else that you’d like to add?
Bennett: I think it’s really good that the SOA is highlighting this, as I think this sort of nontraditional work will be the norm. [InsurTech startup] Lemonade has publicly stated that it doesn’t want actuaries. I think they’re mistaken. I think they’re thinking of actuaries in the traditional stereotype, not as dynamic thinkers who can really evaluate the field and what’s going on. Lemonade has made some mistakes that could have been avoided. Supplementing their AI with an actuary could be beneficial, but it will take the right sort of actuary.
Maas: I’ve enjoyed every day of my career change. I’m expanding my knowledge and skills by working with so many departments outside of the core actuarial team.
Dewan: When I got my first actuarial job out of school in 1976, my salary was $11,000. You know, as an actuary, your salary moves up very nicely. You pass an exam, you get more money; you move up, you get more money. It’s a fantastic career for your monetary well-being. In 1987, in trying to build a new career, I made $11,000 again. There was risk, but it’s been very rewarding for me personally to take that risk. Being an insurance actuary was great, but being a sports actuary has been even better.
Copyright © 2019 by the Society of Actuaries, Schaumburg, Illinois.